1. BID Network meeting 21 February 2017 Kylie Evans and Andrew Duncan
Annual Budget 2017/2018
BID Network meeting
21 February 2017
Kylie Evans and Andrew Duncan

2. Agenda Brief overview of the process Consultation items adopted
Discuss five main topics
Consultation approach and how you can have your say
Next steps
Questions

3. Process overview Public Local Boards Mayor and Councillors Business
Working updates
Nov
Committee update
Issues and Opportunities
Mayoral proposal
Local Boards agree to consultation content
Dec
Agree consultation items
Jan
Budget refresh
Feb
Adopt Consultation Document
Public Consultation
Including Local Board Agreements and Tūpuna Maunga Authority Plan
Mar
Apr
Final Mayoral proposal
May
Decision-making
Decision-making
Local Boards adopt Local Board Agreements
Jun
Adopt Annual Plan 2017/2018
Including Local Board Agreements and Tūpuna Maunga Authority Plan

4. Items for consultation
Main topics
Issue 1: Rates increase
Issue 2: Rating stability
Issue 3: Paying for tourism promotion
Issue 4: Paying for housing infrastructure
Issue 5: Living Wage
Changes to local initiatives
Other topics, such as
New Business Improvement Districts (BIDs) or changes to existing ones
Tūpuna Maunga draft Operational Plan 2017/2018
Homelessness
Mass Transit

5. Issue 1: Rates increase Consultation Document Page 6
Option A.
3.5% average rates increase
Option B.
2.5% average rates increase
Option C.
2% average rates increase
We could deliver everything we currently have planned and invest in more such as transport
We could deliver everything we currently have planned
We would be unable to deliver our currently planned investments and services – decisions would be needed about which investments or services will be reduced
Consultation Document
Page 6
Supporting Information
Page 3

6. Issue 2: Rates stability
Option A.
Retain our current policy so residential ratepayers have a higher increase than business ratepayers
Option B.
Change our policy so business and residential ratepayers have the same increase in 2017/2018
Residential rates would increase by more than business rates
Ensures a steady progress towards the end goal of a more even split between business and residential ratepayers
A clear and simple policy
No reduction in the share of rates paid by businesses in 2017/2018
Consultation Document
Page 8
Supporting Information
Page 7
Our preferred option:
Option B
ISSUE: We consider that businesses should pay a greater share of rates than residential properties but that the present share is too high and should be reduced gradually over time. Our current policy seeks to achieve this by applying a higher than average rates increase to residential ratepayers each year, and a lower than average increase to business ratepayers

7. Issue 3: Paying for tourism promotion
Option A.
Continue to fund with general rates
Option B.
Fund with a targeted rate on accommodation providers
Costs will continue to be spread across all ratepayers
Does not release funds for other priorities within Auckland
The average residential ratepayer will contribute $46 next year to this activity
Accommodation provides will pay a rate that works out to be approx. 4% of their revenue
If passed onto visitors, it is likely to be $6-$10 per night on an average hotel room rate
Freed up general rates to invest $250-$300m more in transport infrastructure over the next 10 years.
Consultation Document
Page 9
Supporting Information
Page 15
Our preferred option:
Option B
ISSUE:
The council currently spends $20 - $30 million of general rates money each year on tourism promotion and major events which provide significant benefits to accommodation providers such as hotels and motels. To continue to support Auckland’s rapid tourism growth while keeping rates fair and affordable, we need to consider new ways to pay for this spending.

8. Issue 4: Paying for housing infrastructure
Option A.
Continue to only rely on existing growth charges
Option B.
Change our funding policy
Option C.
Rely on existing tools for now and request central government to provide new growth charges for growth infrastructure
- If the council uses general rates to fund new critical infrastructure for houses, then ratepayers across Auckland will pay higher rates to subsidise these new developments.
- Provides another tool to help fund infrastructure to enable more houses to be built sooner
Legislation could be changed to allow a range of funding tools for housing infrastructure
Better alignment between who pays for infrastructure and who benefits
Consultation Document
Page 10
Supporting Information
Page 35
ISSUE:
All houses require roads, drains, water supply and sewerage. The council currently invests billions of dollars to provide for a growing Auckland, but this is not enough to keep up with the unprecedented demand for housing. We need new ways to pay for all the costs involved in unlocking more land for houses, without the need for large increases in general rates.
Key examples include:
Municipal Utility District bonds
Tax increment financing
Value capture mechanisms
Our preferred option:
Option B

9. Issue 5: Paying council staff a living wage
Option A.
Continue with current pay policies
Option B.
Implement a living wage for staff of Auckland Council and its substantive CCOs
The council’s social equity policy provides a higher wage increase
While the above change help, they will not be sufficient to ensure all council staff receive a living wage
The council would phase in a living wage over the council term ending October 2019
The additional cost is projected to up to $2.5m in 2017/2018 and $7m per year by the of the council term
These costs would be covered by savings without impacting on the services we deliver
Consultation Document
Page 12
Supporting Information
Page 42
The current adult minimum wage is $15.25 per hour, and it will be $15.75 an hour from 1 April 2017.
It is currently $19.80 per hour based on the published rate by Living Wage Movement Aotearoa New Zealand and we estimate it may increase to be around $20.20 per hour in 2017/2018 based on council
At present around 2,200 staff employed by the council and its substantive council-controlled organisations (CCOs) earn less than $20.20 per hour. 66 per cent of these staff are female.
Our preferred option:
Option B

10. Consultation approach

11. Objectives
Raise awareness and understanding of the Annual Budget and consultation topics & key trade-offs
Make it easy for a wide range of Aucklanders to participate
Provide Governing body members with useful insights into the views of Aucklanders to better inform decision-making
Increase overall trust and confidence in council processes, decision-making and financial management

12. Approach to engagement & communication
Council channels - Shape Auckland, OurAuckland – digital and print, Social media, local boards networks, libraries & service centres
Face-to-face – have your say events and presence at wide range of community events
Advertising – community newspapers & Fairfax partnership

13. Next steps Monday 27 February Public consultation opens
Monday 27 March
Public consultation closes
April
Elected members receive summarised public feedback
May
Workshops held to discuss budgets
1 June
Budget decisions made
29 June
Adoption of the final Annual Budget 2017/2018
July
Decisions and documentation made available online, libraries, services centres and local board offices

14. Any questions?